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House Sales at Six-year High, Prices Rise to New Record

The number of New Zealand house sales rose to a six-year high last month and prices touched a new record as Auckland continued to drive up the national average.

Some 8128 houses were sold in March, up 23 percent from February and 11 percent from the same month a year earlier, according to the Real Estate Institute.

The national median price rose an annual 8.1 percent to $400,000, the first time it has broken the $400,000 mark.

About 90 percent of the increase in the median price has come from Auckland and Canterbury over the past year, meaning those markets – which account for just over half of all sales – are over-represented.

“There’s a real danger that the Auckland housing market is mistaken for the New Zealand housing market, and that regulatory decisions will be made on the assumption that conditions in Auckland and Canterbury are replicated across the rest of the country,” chief executive Helen O’Sullivan says in a statement.

“Across the rest of the country while activity is picking up, price gains are far more modest.”

The figures come after Finance Minister Bill English today flagged housing as a risk to New Zealand’s economy in a pre-Budget speech, saying it could drive up interest rates if the current level of property price inflation persists.

Quotable Value figures earlier this week showed property values continued to grow in March, albeit at a slower pace.